Health care district seeks operator for Petaluma Valley Hospital

The district that runs Petaluma’s only hospital is listening to the community as it looks for an operator for Petaluma Valley Hospital.

The Petaluma Health Care District has been analyzing a recent summary of input from residents, district officials said. The next step will be to issue a request for proposals from providers interested in running the district-owned hospital under a new lease starting in 2017, officials said.

The report, based on a number of focus groups and interviews held over the past few months, represents the first phase of public input and will help the district evaluate those proposals and outline the kind of services desired at the 80-bed acute care hospital through 2037, said district CEO Ramona Faith. A current 20-year lease with St. Joseph Health will expire in January 2017 and the operator is considered likely to bid for continuing its lease with the district.

Whether St. Joseph or another operator emerges as the front-runner for another 20 years, Petaluma voters will ultimately approve the new lease. The district anticipates issuing the request for proposals within two months, she said.

“Our relationship with St. Joe’s is good, but it’s part of our responsibility to do our due diligence and see what options are out there,” Faith said.

Completed in March, the focus group report reflects the sentiment of 57 individuals hand-picked for their leadership and expertise in health care, business, education, social services and city government in Sonoma and Marin counties.

The report showed a strong desire for a provider that could maintain emergency services, radiology and mammography, inpatient services and intensive care, while expanding services like those addressing Petaluma’s aging population, primary care for new patients and greater availability of pharmacy and radiology services.

Participants also expressed a strong desire for a provider that would maintain or even expand the maternity, obstetrics and gynecology program at the hospital, services that have become less financially viable following cuts to reimbursement rates from Medi-Cal, California’s version of Medicaid, in recent years.

Those cuts have occurred despite the ongoing popularity of the hospital’s practice, which averages 40 deliveries per month and has seen those numbers rising along with overall OB-GYN services, according to information from the district.

“I would consider that an essential service,” said Elece Hempel, chairwoman of the health care district’s board of directors.

The district will select a final candidate based on the proposal’s ability to meet the projected health care needs of Petaluma over the next 20 years, and will conduct a series of public forums to explain the selection and solicit public feedback, Faith said. The choice will ultimately be put on the ballot for Petaluma voters, likely within the next year, Faith said.

“This community is going to vote on what this future hospital will look like, not the district,” she said.

Petaluma Valley Hospital was operated independently by the district until 1997, when St. Joseph began its current lease. The decision stemmed in part from increasing pressures making it harder for smaller, independent hospitals to stay afloat - pressures that many argue have only intensified in the Affordable Care Act’s reform-driven landscape.

The district maintains a desire to find a tenant to operate the hospital, and a return to independent operation is not currently on the table, Faith said. If voters do not approve a new agreement with a provider in time for the end of the current lease, however, a temporary return to independent operation or a reduction in services may be among the options as the search continues.

District officials said they felt that outcome was unlikely, citing their vetting of a potential provider and upcoming phases of community outreach.

“We would hope to put something in front of the community that they would strongly support,” Hempel said.

St. Joseph Health operates three hospitals in the North Bay and a total of 16 facilities across California, New Mexico and Texas.

A spokeswoman for St. Joseph declined to comment on the current lease process, and referred questions to the district.

(Contact Eric Gneckow at eric.gneckow@arguscourier.com.)